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suz it looks like housing was the theme but what about other loans, business loans, auto loans, you know, personal loans, what you can tell us about that? >> right. at least at these big companies we're not seeing the kind of growth outside a mortgage that we have seen in recent quarters. loan growth is pretty slow. and the truth is that as a lot of people know and most viewers know, today if you really don't need a loan, if you've got stellar credit, you can get a loan pretty easily. but for many other people it's stillery tough. but the net effect is that outside of mortgage, we're not seeing a lot of loan growth. >> so is this going to be the theme when we get a new batch of earnings next week? we have city reporting on
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monday, then bank of america on tuesday, also goldman saks and more gag stanley reporting on the investment banking side. what do you think we're going to hear from those companies? >> okay, so it's the inand yang of banking in the world of quantitative easing. on the one side this interest-rate environment is tough. the spread between deposits and loans narrowing. on the other hand there's pret good activity, housing is picking up, credit is getting better. as we look at the bank earnings we have to differentiate who is hit by that net interest margin issue and who can benefit on the other side. we look at citi and think they can report a good monday on positive-- monday so that could be positive. on the other hand bank of america facing pressures from the deposit versus lending squeeze. >> you told me citi was your top recommendation right now. tell us why? >> well, we look at citi and it's a bank that has not performed as well as some of those other tough ones like bank of america ts year. the one hand. on the other hand we think it's a great play on what the federal reserve is
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doing. when they put all this money into the economy they are 12i78ity-- stimulating housing. citi has problem relating to housing. they are stimulating emerging markets where citi is the strongest. >> all right, let's take a look at some of your other picks besides citi. you like goldman sachs. you have been telling us this all year. and the regional bank suntrust. again, was's the attraction? >> suntrust again is in the southet. it has continuedto have credit problems later than a lot of the other banks. but that's been a bad thingment but now we think it's a good thing. because right now we can still see a lot of positive improvements as we start to see a pick up in the economy and housing and places like florida, can help move that stock back up. so we still like suntrust. >> we just have about 45$p)-sec. a new round of bank stress tests coming up. how do you think banks are going to do. are they strong enough to withstand a financial downturn? >> well, i think they're
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strong enough. the question is does the fed think they're strongnough. and that is what we will find out. i think it will be a tough time period for the banks. because the stress test scenario, otherwise what they are going to be stressed for comes out after thanksgiving. that is right before we go into the fiscal cliff debate in the u.s. so the fed will be very concerned about that. and they are going to put out a very tough stress test on the banks. we'll see what happens but i think we'll probably-- could be yet again a little bit disappointed from what we hope for in terms of dividends and share repurchase out of the big banks. >> we have to leave it there. any disclosures on the stocks that you talked about? >> no, thanks. >> have a great weekend, fred canon of kbw. >> i'm diane eastabrook in chicago. still ahead, is the housing market ready to rally? i'll tell you what one expert thinks. >> susie: american consumers are feeling pretty good about the economy. the university of michigan's latest reading on consumer sentiment hit a five-year high.
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that comes as the treasury reports the u.s. budget deficit topped $1 trillion in fiscal 2012. that's our fourth-largest budget deficit since world war two. that held wall street's gains in check: the dow rose 2.5 points, the nasdaq fell five. the s&p down four. for the week, the major averages were all off more than 2%. the nasdaq was hit the worst, down almost 3%. >> susie: a new housing boom? >> susie: a new housing boom?
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a lot of talk and headlines about a recovery in housing. even consumers are feeling more confident as they see signs of a pick up in housing. next week we'll get more direction on where the nation's housing market is headed with the latest monthly numbers on new home conruction and sales of exting homes. diane eastabrook reports. >> reporter: it looks like the housing market is finally emerging from its long funk. in august existing home sales increased nearly 8% to their highest level in more than two years. home construction is gaining steam along with builder confidence. and the standard and poors case shiller home price index which tracks home prices has made month over month gains all year. but in markets like chicago, atlanta, and new york a couple of months have shown year over year prices declined. that worries yale economist robert shiller who co-founded the index that bears his name. >> every year 2009, 2010, 2011, and 12, 've seen a big summer rally and then it collapses again, so that's why it's hard to predict real estate prices now. >> reporter: while the pickup in
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home sales has been encouraging to builders, housing analyst megan mcgrath says builders are looking for better guidance on pricing. >> we think it's going to be in 2013-- what you need to see is pricing. you're going to want to see pricing start to go up significantly so builders can see better revenues and better margins. >> reporter: shiller fears the housing market could lose momentum over the next few months. he thinks prospective buyers could get sidelined over fears about the fiscal cliff, higher taxes, the european crisis, and another u.s. recession. >> i think it's very hard to predict real estate prices now because the world is in such an unusual situation. there are so many ifs. and because we just recovered from the biggest housing bubble in u.s. history. so we're really in uncharted territory right now. >> reporter: shiller says one problem for the housing market is there is really no sense of urgency for potential home buyers to pull the trigger on a purchase. interest rates are expected to remain low for the foreseeable future and housing prices really
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aren't rising that much. diane eastabrook, "n.b.r.," chicago. >> susie: best buy is revving up its holiday retail strategy. the struggling electronics chain is taking its name to heart and taking aim at online competitors. >> reporter: best buy knows its competition isn't just brick and mortar stores. it learned that lesson the hard way last christmas, when consumers used its stores as a showroom, touching and feeling
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gadgets, only to buy them online for less. so the retailer now hopes to beat the competition at its own game this holiday season, by matching the prices of its top online competitors like amazon and walmart.com. some analysts aren't convinced it'll help sales. >> i think it will help stem market share and sales declines, but i you know we're still expecting a year over year decline for the fourth quarter for them as the product cycle is difficult and competition is still going to be tough. >> reporter: best buy says it's still working on the details of its price matching policy, but there will be exceptions like blackout dates. that means no price matching on black friday or cyber monday. it's also publishing a list of the 20 online sellers it's willing to match, and it says it won't match bargain basement prices from third party retailers on ebay or amazon. it's a time of fierce competition with each side spinning a story of why they are best for ameri5s]jt9q√°books.
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this isn't the presidential election we're talking about. it's something much more important: the holiday marketing blitz. holiday advertising is about to kick in, but it will be competing for attention with a record flood of political ads. darren gersh takes a look at how the two mix. >> hard for those who need a job, hard for those who have a job. >> jobs! >> reporter: when the nation is focused on a big issue, retailers know they have to respond when crafting a marketing message. and this year, the focus of the nation and the election is the economy. >> it affects the messages we send. to the extent the economy is such a hot button issue with the election. you know, you're going to hear us talking about savings. we're going to hear walmart talking about layaways. you're going to hear geico talking about saving 15%. >> reporter: matt williams is general manager at the martin agency, the firm that dreamed up the geico gecko.
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willams is advising clients not to wait for election day to launch their national ad campaigns for the holiday. but that doesn't mean holiday campaigns won't struggle to be heard above all the political noise. >> we're planning for holiday promotions six to nine months out. so it's a very intensive, long lead time kind of planning process and it's always that way, but it is even more so that way during an election time. >> hurry in for black friday deals before thanksgiving. >> reporter: but if you're trying to ramp up marketing for the holidays in a swing state. well, good luck. the barrage of political ads is overwhelming in states like florida. >> the advantage is most hey aliz youe going to buy after the election because people are so spontaneous and so late in shopping that you want to have a bigger impact. >> reporter: jordan zimmerman founded what has become the 14th largest ad agency in the country. he says retailers have plenty of
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time to launch holiday campaigns, which traditionally reach full speed around black friday. and by then, those election ads will be a memory. >> anyone that's trying to advertise in any of the swing states is going to have a very difficult time two weeks before the election, a week before the election. very, very difficult. what i'd say to you is don't try to fight the election for the last two weeks. >> reporte but vertisers might actually be a little sorry to see this campaign season end. they point to studies that find regular commercials do better in an election because consumers get tired of all the attack ads. darren gersh, "n.b.r.," washington. >> susie: once those ad campaigns kick into high gear consumers may be ready to spend. as we mentioned earlier in the program, the latest data shows consumer sentiment in october is at its highest level in five years. one new product likely to be at the top of everyone's shopping list is the latest gadget from apple. apple reportedly plans to host an event on october 23rd to
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unveil a smaller version of its ipad. the new device will go head-to- head with similar sized tablets from amazon and google. shares of apple ended the session up 0.3% closing at $629 a share. as we've been reporting, consumer's affection for tablets is taking a toll on p.c. makers and parts suppliers. last night, advanced micro devices issued a gloomy forecast that suggests the trend is proving problematic for the chip maker. shares of advanced micro sank more than 14%, its lowest close since the spring of 2009. meantime, shares of s.t. microelectornics surged on talk it may be looking to split itself in two. there were reports the european chipmaking giant was considering a breakup of the business. company officials denied that report. shares of s.t. micro climbed nearly 6.5%, a three-week high. google's dominance in online search is raising some eyebrows at the federal trade commission. regulators are reportedly looking into filing an antitrust case against the company.
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travel and shopping sites are allegedly concerned by rising advertising expenses to get better placement. shares in google have been backing off there an all-time which they hit last week. they ended down nearly $7. travelzoo is trying to strengthen its market position in the online travel space. it's reportedly exploring the purchase of a hotel booking site to beef-up its offerings. travelzoo also said it would miss quarterly profit expectations when it reports results on the 25th. investors bailed on the news. the stock sank almost 15% back towards its lows for the year. some encouraging news in the drug development arena. u.s. regulators approved the use of celgene's breast cancer drug to also include treatment for one of the most common forms of lung cancer. shares of celgene advanced about 1%. biogen i-dec also getting a small boost today on the back of positive results from two late- stage studies that its multiple sclerosis pill significantly reduces relapses and the
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progression of disability related to m.s. shares of biogen were up a dime to $147 a share. and, one initial public offering started trading here at the new york stock exchange. sharesf work-day soared 74% as the market for business to business software continues to hold strong. shares in j.b. hunt transportation were on a roll. several analysts, impressed with growth in some key operations raised their price target. j.b. hunt was the best performer in the dow transports today, rising 6.5%. as we mentioned earlier, there was weakness in financials. this pulled down the s.p.d.r. financials e.t.f. it was the hardest hit among our most actively traded e.t.f.s. and that's tonight's market focus.
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>> susie: the major stock averages are down about one percent for october, but our market monitor is bullish. james paulsen expects stocks to rally through the end of this year and into 2013. he's chief investment strategist at wells capital management. nice to see you, jim. you know, there are so many gloomy forecasts out there. tell the us why you're so bullish? >> well, i think we're consolidating a little bit right now after the big run-up in the summer, susie. down over the last month. that could continue a while. i guess i see two big catalysts as we go into next year. one i think even though the economy is growing far slower than anyone-- than will please anybody, more and more part of it are starting to work. we're starting to gear, if you
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will. and you just reported confidence went to a five-year high this morning among households. the unemployment rate is down 1.2% in last year, the biggest drop in the recovery. this is comes at a time when the labor force is growing at the fastest pace this year. debt burdens were at a record high. now they're close to record lows. bank lending was absent until about a year ago. now it's rising. housing activity is showing up. home prices are rising. stock market at a four-year high. my point, is i think we'll start to accept that this recovery-- even though it's slow-- is sustainable, and that may raise the valuation people are willing to pay for assets. secondly, i think a big catalyst is going to be if chinese officials and others can turn the emerging world. and if that starts to reaccelerate, i think people get more aggressive with the belief that the global recovery looks secure. >> susan: there are a lot of ifs on that. all the forecast wiers get regular for very slow global growth. we hear a lot about china.
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what's going to be the catalyst to turn around the situation globally? >> well, i think for china, the reason they slowed is because they tightened interest rates very dramatically in 2010 and 2011 and they slowed their money supply. if you look at what they've been doing since the early part of this year, they've pretty dramatically lowered their interest rates. their money supply is growing more rapidly again. and i think by the end of this year, the first quarter of next year, we'll start to see the impact of those easing policies with better reports coming out of china. and that could-- that could raise investor aggressiveness, i think, as we enter into 2013. >> susan: all right, let's break it down a little bit. in terms of how can investors play on the scenes you're talking about. let's take a look here at a list of investment strategies you have. you do like the emerging markets, as you were just talking about, this particular chine and pacific rim. you like india. and south and central america,
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and you're mostly advertising througe.t.f.. talk us through this a little bit more. >> well, i think the whole emerging world economy has been through a similar cycle here where they let us out of the 2008 crisis. then they've slowed themselves down, and now they're all working to reaccelerate their economic recoveries. so rather than try to take a bet on a specific emerging market, i think that you ought to make sure you're sort of over- weighted the entire emerging world cycle a little bit. i think the whole thing will be leading the stock market in 2013. if you want to, you know, wait some more than others, i think i'm more inclined to south central america, its mexican market is doing well. i like india. the index is a strong upward momentum again and i think china is working lard and will indeed turn in 2013 gludz gleuz let me move you along. you had a lot to say about the u.s. economy doing so much
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better. and these are the stock sect oors you told me you find most promising. let's take a look here. industrials, basic materiales, financials. talk us through the kinds of stock and why you selected them? >> yeah, well, let's start with the industrials as basics. i really like the manufacturing stocks heading into next year, in this country. i think the manufacturing sector, its performance here is very much tied to what's going on with emerging market economic cycle. the manufacturing sector led us out of the recession when the emerging world was leaving the globe. when the emerging world slowed, our manufacturing sector slowed this year. if the emerging world picks up, i think manufacturing will be leading our economy again in 2013. and right now, you can pick up industrial stocks, s & p industrials or s & p bake materials at very low relative prices because they've been selling off over much of this
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last year. a good value ahead of an upturn. >> susan sorry we didn't get more explanation. i'm sorry, jim. we've just run out of time. a lot of good information, and hopefully we get some of this on it our web site so our viewers can follow up. thank you so much. have a great weekend. we appreciate you coming on pup our market monitor, james paulsen, chief investment strategist at wells capital management. next week on n.b.r., we'll get a check on the nation's airlines as we head into the holiday travel season. and a special series on the rise of the freelancer. all week we'll look at ways temporary and contract workers are changing how american companies do business. when it comes to making a good impression, it's always important to be on your best behavior. this week, lou'seen thinking abt who's watching. re's author and educator lou heckler. >> on a trip to london, i ran across an interesting newspaper feature called on a typical day
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in london. it described how many how many of those black taxis would pass you, how much you would likely spend on parking and such. one statistic really got my attention: on an average day, you will be on camera 300 times. we're not talking on camera like the one i'm on right now, we're talking security cameras. then, just the other day, my wife and i were having breakfast out at one of those ubiquitous coffee places, a woman came by with one of the most unusual baby strollers i'd ever seen. i commented to her that it was really quite wonderful and before i could finish she blurted, i know you! you spoke at our conference last friday. it reminded me of a great piece of advice i got years ago when i an old friend said, just remember, you're always under your people are watching you like hawks every day to see if your actions match your words. it really doesn't matter if were being watched 300 times a day or once. what people around us value are consistency, compatibility and caring. oh and thanks for watching! i'm lou heckler. >> susie: and finally, not a person, not a president, not a head of state. today's winner of the nobel
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peace prize: the european union, left many people scratching their heads. the nobel committee noted the economic drama playing out across much of the 27-nation bloc, but said it chooses to focus on the e.u.'s most important role. "the stabilizing part played by the e.u. has helped to transform most of europe from a continent of war to a continent of peace." the big questions now, who will accept the award, and how to get all 27-nation's to agree on the acceptance speech. that's "nightly business report" for friday, october 12. thanks for watching and have a great weekend everyone. we'll see you online at nbr.com and back here on monday night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org
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tv
Nightly Business Report
PBS October 12, 2012 4:30pm-5:00pm PDT

News/Business. (2012) New. (CC) (Stereo)

TOPIC FREQUENCY U.s. 6, Us 6, Citi 6, America 5, China 4, Shiller 3, Suntrust 3, Diane Eastabrook 3, Chicago 3, London 2, India 2, New York 2, Jim 2, Darren Gersh 2, Biogen 2, Florida 2, Paulsen 1, Susie 1, T.f. 1, Celgene 1
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